Sunday, December 11, 2011

Local butter famine

It's a tragic comedy when costly actions designed to help a situation only make it worse. Hat tip to Kevin "Angus" Grier for this most recent example, Norway's clunky tariffs combined with a new butter-heavy fad diet and lower milk production to create a massive butter shortage.

Localists talk about "food security," the idea that focusing on local food production will protect civilization from food shortages, contain outbreaks and save humanity when doomsday strikes and all interstate deliveries stop.

But instead of having food security, the protectionist policies have created a butter famine. Those same tariffs that block foreign goods with the intention of tilting the market in favor of local farmers is hurting the country. The Norwegians are experiencing food insecurity, as the only way the average person can obtain a basic food item like "smør" is through the Internet at a price around $13 for two sticks.Clearly, the dairy farmers are making a mint right now, but it's at the expense of the general public. It takes a certain breed of ignorance to conclude that this is good for society.

Blocking foreign butter is hurting, not helping, the people of Norway. Just like insurance spreads risk among a large group of people, free trade spreads local shortages out among the entire world. Norway is not experiencing a butter famine because of low milk levels and a sudden high demand. Those two problems alone would hardly made a dent in the world butter market if the country embraced free trade.

If you want to make sure your local community has access to something as basic as butter, the last thing you want to do sign legislation to limit who the public can buy butter from.